Massachusetts Secretary of the Commonwealth William Galvin is charging Securities America with inadequate supervision of a broker who is accused of using a “grossly deceptive” radio ad campaign to target older investors. The state regulator said that the financial firm shouldn’t have approved the spots that Barry Armstrong ran on his AM radio show. His show, which airs on WRKO-AM, is syndicated on different stations.

The broker purportedly ran ads asking listeners to call for information related to Alzheimer’s Disease when what Armstrong really was doing was collecting their contact information so he could offer to sell them financial advice. Galvin’s office said that the broker engaged in ‘bait and switch’ by falsely advertising one service when he was really selling another type of service.

The regulator contends that Securities America failed to identify or prevent Armstrong’s unethical conduct by neglecting to ask even one question about the content of the ads or attendant mailing materials. Now, the state wants a censure, a cease-and-desist order, and a fine imposed against the firm.
Securities America disagrees with the allegations and intends to defend itself. Armstrong also disagrees with the state’s claims and is adamant that no false advertising took place. The broker said that his personal experience with Alzheimer’s is what compelled him to offer not just financial advice but also information out the disease. His attorney said that Armstrong wanted to give families financial counsel in the event they develop the condition or become a collateral victim.

Elder Financial Fraud
Regulators have been looking at the marketing and ads directed at seniors. The Financial Industry Regulatory Authority just launched a securities help line at 844-57-HELPS (844-574-3577) for older investors who have questions about their investments and brokerage accounts. Last month, the Securities and Exchange Commission said it would conduct exams on financial firms to take a closer look at the retirement-planning advice that financial representatives offer.

Meantime, more states are looking to enhance senior citizen protections against financial abuse. The North American Securities Administrators Association also has made fighting elder financial abuse a priority, even setting up an advisory committee last year. At a recent conference, NASAA Executive Director Joseph Brady said that over a third of state enforcement actions involve elderly persons. The Securities Industry and Financial Markets Association is also pushing for states to provide better financial protections for older investors.

Washington, Missouri, and Delaware recently put into place laws seeking to stop elder abuse. Brokers are now allowed to report when they suspect someone is trying to bilk one of their clients to local law enforcement and the state. They also can suspend transactions for a time period. Brokers who report abuse will be granted immunity from liability.